Infertility is something that strikes 1 in 8 couples trying to have a baby. I was lucky that with my first two kids, I didn’t have to deal with issues getting pregnant. However, after divorcing and re-marrying, one of the hopes with my new husband was that we would be able to have a baby together. Unfortunately, this time around, it wasn’t that easy. Secondary infertility affects more than a million couples, and we were one of them.

Not only is this an extremely emotional process filled with stress, frustration, and sadness, but, unfortunately, it is also very expensive. And trying to balance the financial decisions of continuing treatment with the volatile emotions involved is difficult. Here are some ideas to help you navigate the financial aspects of struggling with infertility.

Analyze your health care options at your next open enrollment. Most health care plans don’t cover fertility treatment, but research all your options and find out if any plans include coverage for testing or treatments. This can make a huge difference financially, even if it’s just partial coverage.

Find out what you’re dealing with as soon as possible. If you’re trying to get pregnant and it doesn’t happen quickly, your doctor may recommend tests for both partners to determine if there is a cause for the delay in pregnancy. My doctor recommends getting tested after trying for one year in your 20s, 6 months in your 30s, and 3 months in your 40s. The sooner you know the type of treatment you may need, the sooner you can plan financially.

It’s okay to juggle your savings goals to prioritize fertility treatment. Ideally, you’ll continue to take advantage of any employer match on your retirement plan, but don’t worry about maxing it out in the short term. You can also take a break on fully saving for a down payment on a house or other goals, such as college funding for other kids. Taking a break now means you will likely need to play catch-up later, but if you have the surplus cash to be able to divert to the payment of treatments, then it’s a good way to avoid going into debt.

Take advantage of 0% credit card offers. If you don’t have enough cash available right away, you can utilize a new card with 0% interest to either transfer balances of existing debt or for new charges. Websites such as bankrate.com or www.nerdwallet.com offer comparisons of different credit cards to find one that best fits your situation. If you are faced with going into debt to pursue your treatments, try to pay as little interest as possible. Once the treatment is done, you can analyze the debt to determine the quickest payoff plan.

Get on the same page with your partner (financially). Communicate with each other about how far you’re willing to go financially to try to get pregnant. This can be a difficult conversation and you may not be on the same page initially, but it’s important to figure out where you each stand. If you don’t talk about it, then it will just add to the stress you’re already dealing with!

Try to relax. Studies show that the stress of infertility can actually make it more difficult to get pregnant. One study showed that couples were far more likely to get pregnant in the months they reported feeling “good” rather than the months they were stressed or anxious. Another study showed that women who were less stressed were more likely to produce more eggs during ovulation. So, take advantage of opportunities to relax such as meditation, mindfulness, yoga, exercise or anything else that will help take your mind off of the process for a while. Finding a hobby or a passion to pursue can help you relax as well. I recently had a friend get pregnant while taking a break from fertility treatments and relaxing on vacation!

My fertility treatment process wasn’t cheap and it wasn’t covered by insurance. But the good news is that our baby girl, Mackenzie Jane, was born on March 23, 2018! It was a stressful and challenging (as well as expensive!) journey overcoming the obstacle of infertility, but the end result for us was totally worth it!

A longtime client (Carol) shared her concern that it felt like the market was due for a big drop. I smiled and told her that she already knew exactly what I was going to say. Her reply was “tell me again.” It’s the one investment topic an investor can discuss, understand, process, and still wish to revisit regularly. It’s the vitamin C of investing.

Many vitamins (A,D) stay stored in the body for a long period of time. Vitamin C? Not so much. Your body digests it quickly and needs it again and again, just like Carol needs to discuss her fears about experiencing a large loss even though we did at the first meeting, and at every review since then. She agreed to stay the course no matter how scary the volatility gets when we first met. But we also agreed that we can talk about it whenever we need to, which we have been and will probably continue to do.

Tending to Misconceptions

Carol’s need to discuss this regularly isn’t because her long-term memory is failing her. She gets bombarded by economic and investment commentary throughout the year. Naturally, this can lead to some misconceptions that could cause Carol serious harm if she acted on any of them (for example, moving her portfolio to cash because she read a series of articles predicting a crash). Carol is pushing 60 and was nervous about the markets having another large drop just as she was transitioning into a part-time work chapter. She needed a refresher on the role of stocks in her portfolio.

Iterative Conversation

In Sara and Jack Gorman’s great book, Denying to the Grave, they suggest that the ideal process for tending to a person’s misconceptions about a serious topic should be interactive and iterative – that we’re more likely to use the reasoning part of our brains (prefrontal cortex) when we’re engaged in a discussion, than when we’re digesting something passively (article, seminar, podcast, etc.). Since Carol’s concerns about her money are definitely serious, we’ll have a conversation and we’ll revisit it annually to deal with any new misconceptions that arise.

Now and again, a client will email me a question about a recent stock market drop, or, gulp, what the stock market is going to do next. My friends tease me for not being much of a phone person, but when it comes to addressing a client’s concerns about the safety of their money, I will always ask that we have a discussion on the phone or in person. Emails can certainly be iterative, but they’re not interactive. So even if you think the question is nuts or you’ve asked it before, ask it anyway. Your advisor will just see it as an invitation to talk.

Every New Year’s, I pick a resolution that I feel will improve myself over the next 12 months. As a financial planner, I also make an effort to choose one that won’t break the bank. So if you’re looking for a resolution that’s both impactful and affordable, here are a few to consider:

For Your Mind

I was inspired by Mark Zuckerberg’s 2015 resolution to read a book a week, so I’ve been committed to reading 52 books a year (yes, you read that correctly) since then. Because the cost of books can add up quickly over the course of the year, I discovered two great alternatives to buying:

Sign up for an unlimited eBook subscription through your eReader (Kindle, Nook, etc.). You’ll have immediate access to the books you want to read, and the fees are usually very reasonable ($9/month on average). That’s the same amount I pay for Netflix!

Join your local library, which is free for residents and available to non-residents for a nominal fee ($5 for 2 years in Santa Monica). Many libraries now offer electronic borrowing via the Libby app, and you can find participating ones in your area here. Keep in mind that the same lending rules apply: you have to wait if all copies are already checked out and you’re limited to a specific number of books at a given time.

For Your Body

In 2017, my New Year’s resolution was to go car-free (you can read about it in my “Art of Letting Go” blog series here). The original intention for this major life change was to save money. The rent for my new apartment was much higher than my old one, and I was spending $600/month on average for a car that I rarely drove because I live and work in the same city. The unexpected benefit of not having a car was improving my health by getting more exercise. Instead of driving around town, I started walking everywhere – work, church, the gym, and anywhere else that didn’t require ride share. And more time outside has means that I’m getting more Vitamin D (a deficiency many Americans have) and taking more walks along the beach with my dog, Katie. To date, I am still rocking the car-free life.

For Your Soul

The first thing that probably came to mind when you read “soul” is yoga, right? Well, I recently discovered that meditation is a great and often more affordable alternative to yoga. Both can help you stay grounded, discover inner peace, and improve your overall mental health, but mindfulness is most often practiced alone so you don’t have to pay for classes. There are an endless number of free resources online, including video tutorials for beginners, intermediates, and even experienced practitioners. Check out Somuchyoga’s for a list of the 10 Best Guided Meditation Videos on YouTube. Mindfulness apps are also gaining popularity, and they range from $4-12/month depending on what you’re looking for. That’s much more wallet-friendly than $30 yoga classes.

Hopefully you’ll walk away from this blog with at least one doable and cost-effective resolution for 2019 (or 2020). Just remember that it’s never too late to start getting yourself in mental, physical, and spiritual shape!

Eric Jacobsen, the serial entrepreneur and co-founder of private equity firm Dolphin Capital and impact investment platform Gratitude Railroad, spends his workdays at what he calls “the intersection of compassion and capitalism.”

“We work to create financial returns by solving the world’s problems,” Jacobsen says of his two companies. “Capitalism is an organism that changes and grows over time. Entities are realizing that caring about environmental, social and governance (ESG) criteria is better for the bottom line. We work to be ahead of that trend.” This viewpoint has worked well for Jacobsen. Dolphin Capital and Gratitude Road are thriving by investing in innovative businesses that Jacobsen and his partners can believe in.

But as great as Jacobsen feels about the impact of his work, his own personal and charitable investments weren’t always aligned with his beliefs. “I was spending my work time thinking about impact investing,” Jacobsen says, “but I wasn’t doing it personally. I never thought about how the assets in my portfolio could be doing something more meaningful.”

His discomfort with that misalignment kick-started his journey to 100% impact in his personal investments. “If I was going to do this, I needed to go all in,” he explains. This realization led Jacobsen to Toniic’s 100% Impact Network, where he met Brent Kessel of Abacus Wealth Partners (pictured above) at a gathering.

“I was there to share my own portfolio deep dive,” Kessel explains. “I described the progress I’d made towards having 100% of my assets dedicated to social and environmental impact as well as commercial financial returns. Eric was at the time interviewing firms to potentially take over the management of his personal and charitable assets. He was impressed by what I had been able to do personally, and hired Abacus to help him reach his 100% impact goal.”

Abacus has a long history of seeking both positive impact and profitability, and it has proved to be a great fit for Jacobsen. As far back as the early 1990s, the firm offered two to three socially responsible funds that also met Abacus’ standard for financial returns. Over the years, Abacus added more socially responsible funds that clients could opt into. But in 2008, the firm changed its strategy. “At that point, impact investing stopped being an opt-in and became the only thing we offered,” Kessel says. “Our clients have learned that they can have impact and financial returns at the same time, because doing well and doing good isn’t a cliché – it’s extremely doable, as proven by our tripling in size to over $2 billion under management in the past decade.”

Positive impact and positive returns are not the only benefits that Jacobsen has enjoyed in his partnership with Abacus. Going to 100% impact has also changed his relationship with his investments. “I never used to care much about the quarterly rebalancing of my portfolio,” he says. “Now I’m very active in my asset allocation because I’m thinking about how I can use my portfolio to empower women and girls, provide clean air and water, or stem global warming.”

While these kinds of decisions may be harder than simply looking for the best returns, Jacobsen also finds them much more interesting. “The more we look at the world, the better off our investments are,” he says. That’s because investors can feel good that their money is creating both meaning and financial growth.

How much financial growth? As Kessel explains, impact investing may not always earn higher returns than traditional investing, but he advises clients not to expect lower returns either. Jacobsen believes that this is an important equilibrium to keep: both too much attention to values at the expense of profit and too much attention to profit at the expense of values are detrimental ways to do business.

“Heart and profit should have an equal balance, like yin and yang,” Jacobsen says. “Both are necessary for an institution’s success – and for humanity’s success.”

Jacobsen also makes it clear that shifting to 100% impact does not have to be an overnight change. “We all matter in the impact space. It’s like standing on the ground floor of a skyscraper looking up,” he explains. “Just take the first step. Choose to dine at the minority-owned local restaurant. Sell your tobacco stock. Invest in a company whose mission you believe in. The journey to 100% impact begins by understanding that every dollar you touch has an impact. Does it have the impact you want?”

I was recently watching an episode of the TV show 30 Rock where Liz Lemon, played by Tina Fey, was awarded the G.E. Followship Award (which recognizes the G.E. employee who best exemplifies a follower) along with a $10,000 prize. I chuckled along as Liz’s boss, Jack Donaghy, played by Alec Baldwin, questioned whether she was going to contribute the money to her 401k, to which Liz responded, “I should probably get one of those.”

While 30 Rock is a fictional TV show, employees not taking advantage of employer retirement plans (e.g. 401k, 403b, etc.) is not a fictional situation. And more often than not, the reason is simply because they don’t fully understand how they work or the advantages they provide – that’s where I come in! Let me break it down for you.

What is a retirement plan?

A retirement plan is an account, established through an employer, which employees can contribute a portion of their paycheck to that is earmarked specifically for retirement.

The most common retirement plans are named according to the section of the tax code that governs them:

401(k): offered to employees of for-profit organizations

403(b): offered to employees of nonprofit organizations

457: offered to state & local government employees

How does it work?

Each employer sponsored retirement plan has investment options that an employee can choose from, such as stocks, bonds, or mutual funds – just to name a few. Once the funds have been chosen, the employee must decide what percentage or dollar amount will be automatically deducted from each paycheck and invested into their retirement account.

What are some benefits?

Taxes: One of the main advantages to a retirement account are the tax savings. Contributions made to a traditional 401(k), 403(b), or 457 account are made with pre-tax dollars. This means that any money contributed will lower your taxable income for the year. Additionally, these types of accounts offer tax-free growth, which means the money invested will not be taxed until you withdraw the money in retirement.

Employer Matching: Another potential benefit is that a company may offer some type of employer match. This refers to a specific dollar amount an employer promises to contribute if the employee makes their own similar contribution. For example, an employer may offer to contribute a dollar-for-dollar amount up to a specific percentage (e.g. 5%) of the employee’s compensation. First, find out how much your employer is willing to match. Next, determine the minimum contribution required to get the maximum employer match. You should try to contribute at least this much, otherwise you would be missing out on what is essentially free money.

What is the maximum allowed contribution?

The IRS allows employees to contribute up to a designated amount each year ($19,000 for 2019). For those over age 50, an additional $6,000 “catch-up” contribution is permitted.

What happens to your account if you change jobs?

Employer sponsored retirement accounts are considered portable, which means you can transfer and/or consolidate your accounts if you were to find a new job. There are several options available when you leave an employer:

Leave the money in your former employer’s plan

Roll over the money into your new employer’s plan (if the new plan allows transfers)

Roll over the money into a Rollover Individual Retirement Account (IRA)

The best option for you will depend on how each employer’s plan is set up. You should speak to an advisor to determine the best strategy.

When can you withdraw money without penalty?

Retirement accounts have specific conditions around withdrawing money. Any withdrawals from a retirement account prior to age 59 1/2, for any reason other than IRS approved exceptions, are subject to a 10% penalty in addition to any taxes owed.

Now that we’ve covered the basics, it’s pretty clear that contributing to an employer sponsored retirement plan is a fantastic savings strategy. Not only can you take advantage of tax savings and free money, but you can also begin to build wealth well before your retirement years.

Tune in for my next blog where we’ll explore another employee benefit: life insurance.

Between Now and Success: Using Your Relationship to Money as a Path to Personal and Professional Growth

Founder and CEO of Abacus Wealth Partners, Brent Kessel was recently featured on the podcast “Between Now and Success” hosted by Steve Sanduski. Find out how Brent’s path through life and personal passions have had an influence on how he runs his firm.

More Details from Steve Sanduski

Today’s guest is Brent Kessel. Brent is founder of Abacus Wealth Partners, which has more than 50 employees and more than $2 billion in assets under management.

About ten years ago I was reading a Buddhist magazine and did a double-take when I saw an ad for a financial advisory firm on its back cover. Abacus Wealth has been on my radar ever since.

“I have been a student of different kinds of Eastern traditions, mostly yoga and mindfulness meditation, for over 25 years,” Brent says. “As your listeners probably know, the abacus is a Chinese mathematical computational instrument. What I liked about that name is that it felt like it brought in Eastern tradition and history along with computational dexterity, just the ability to really think, figure things out precisely.”

Brent’s unique path through life and personal passions have had a big influence on how he runs his firm. We discussed how that confluence has helped to make Abacus stand out from the crowd while also offering its clients a mind-opening perspective on what the wealth they’re building is really for.

]]>86414th Quarter Market Review: Why Should You Diversify?https://abacuswealth.com/4th-quarter-market-review-why-should-you-diversify/
Sun, 10 Feb 2019 21:55:20 +0000https://abacuswealth.com/?p=8562As 2019 begins, and with US stocks outperforming non-US stocks in recent years, some investors have again turned their attention towards the role that global diversification plays in their portfolios. For the five-year period ending December 31, 2018, the S&P…

]]>As 2019 begins, and with US stocks outperforming non-US stocks in recent years, some investors have again turned their attention towards the role that global diversification plays in their portfolios. For the five-year period ending December 31, 2018, the S&P 500 Index had an annualized return (including dividends) of 8.49% while the MSCI World ex USA Index returned 0.34%, and the MSCI Emerging Markets Index returned 1.65%. As US stocks have outperformed international and emerging markets stocks over the last several years, some investors might be reconsidering the benefits of investing outside the US.

While there are many reasons why a US-based investor may prefer a degree of home bias in their equity allocation, using return differences over a relatively short period as the sole input into this decision may result in missing opportunities that the global markets offer. While international and emerging markets stocks have delivered disappointing returns relative to the US over the last few years, it is important to remember that:

Non-US stocks help provide valuable diversification benefits.

Recent performance is not a reliable indicator
of future returns.

THERE’S A WORLD OF OPPORTUNITY IN EQUITIES

The global equity market is large and represents a world of investment opportunities. As shown in Exhibit 1, nearly half of the investment opportunities in global equity markets lie outside the US. Non-US stocks, including developed and emerging markets, account for 48% of world market capitalization[1] and represent thousands of companies in countries all over the world. A portfolio investing solely within the US would not be exposed to the performance of those markets.

Exhibit 1. World Equity Market Capitalization

As of December 31, 2017. Data provided by Bloomberg. Market cap data is free-float adjusted and meets minimum liquidity and listing requirements. China market capitalization excludes A-shares, which are generally only available to mainland China investors. For educational purposes; should not be used as investment advice.

THE LOST DECADE

We can examine the potential opportunity cost associated with failing to diversify globally by reflecting on the period in global markets from 2000–2009. During this period, often called the “lost decade” by US investors, the S&P 500 Index recorded its worst ever 10-year performance with a total cumulative return of –9.1%. However, looking beyond US large cap equities, conditions were more favorable for global equity investors as most equity asset classes outside of the US generated positive returns over the course of the decade. (See Exhibit 2.)

Expanding beyond this period and looking at performance for each of the 11 decades starting in 1900 and ending in 2010, the US market outperformed the world market in five decades and underperformed in the other six.[2] This further reinforces why an investor pursuing the equity premium should consider a global allocation. By holding a globally diversified portfolio, investors are positioned to capture returns wherever they occur.

PICK A COUNTRY?

Are there systematic ways to identify which countries will outperform others in advance? Exhibit 3 illustrates the randomness in country equity market rankings (from highest to lowest) for 22 different developed market countries over the past 20 years. This graphic conveys how difficult it would be to execute a strategy that relies on picking the best country and the resulting importance of diversification.

In addition, concentrating a portfolio in any one country can expose investors to large variations in returns. The difference between the best- and worst‑performing countries can be significant. For example, since 1998, the average return of the best‑performing developed market country was approximately 44%, while the average return of the worst-performing country was approximately -16%. Diversification means an investor’s portfolio is unlikely to be the best or worst performing relative to any individual country, but diversification also provides a means to achieve a more consistent outcome and more importantly helps reduce and manage catastrophic losses that can be associated with investing in just a small number of stocks or a single country.

A DIVERSIFIED APPROACH

Over long periods of time, investors may benefit from consistent exposure in their portfolios to both US and non‑US equities. While both asset classes offer the potential to earn positive expected returns in the long run, they may perform quite differently over short periods. While the performance of different countries and asset classes will vary over time, there is no reliable evidence that this performance can be predicted in advance. An approach to equity investing that uses the global opportunity set available to investors can provide diversification benefits as well as potentially higher expected returns.

Disclosures:Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Diversification does not eliminate the risk of market loss.

There is no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal. Investors should talk to their financial advisor prior to making any investment decision.

All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services.

]]>8562Sustainability Story: Wilmar Internationalhttps://abacuswealth.com/sustainability-story-wilmar-international/
Sun, 10 Feb 2019 21:53:28 +0000https://abacuswealth.com/?p=8560World’s largest palm oil trader releases plan to eliminate deforestation among its suppliers. Palm oil is one of those ubiquitous commodities that can be found in a wide range of household products, from baked goods and fried foods to shampoo…

]]>World’s largest palm oil trader releases plan to eliminate deforestation among its suppliers.

Palm oil is one of those ubiquitous commodities that can be found in a wide range of household products, from baked goods and fried foods to shampoo and soap. In fact, global palm oil production more than doubled between 2000 and 2012, and about a third of all vegetable oil used worldwide is palm oil. Unfortunately, palm oil production is also a major contributor to global climate change since carbon-rich tropical forests are often cut down to make room for palm tree plantations. In addition to the environmental impacts, palm oil producers frequently employ forced or child labor – making this a human rights concern as well[1].

The world’s largest palm oil trader is called Wilmar International, which supplies more than 40% of the world’s palm oil to major consumer brands such as Nestle, Unilever, and Procter & Gamble. In an effort to address some of the social and environmental concerns around palm oil production, Wilmar adopted a “No Deforestation, No Peat, No Exploitation” (NDPE) policy in 2013, and all other major palm oil traders followed suit and adopted similar policies in 2014. However, these policies have been difficult to enforce because traders and their customers lack the maps needed to monitor activity on the ground.

Therefore, on December 10th, Wilmar published a new action plan which commits the company to map the entire landbank used to grow palm trees by the end of 2019, and to monitor more effectively its suppliers and to crack down on those that fail to comply with its ethical standards. More specifically, the plan lays out a number of action items that will allow Wilmar to make good on its NDPE commitment[2]:

Wilmar will require all suppliers to sign a written confirmation of their commitment to the NDPE policy by Q1 2019. The firm will also begin enforcing a new grievance model of “Suspend the Engage” for all suppliers found to violate their commitment, starting in January of 2019.

Together with an NGO called Aidenvironment, Wilmar will identify and map all land used to grow palm trees, allowing the firm to monitor its suppliers using high-resolution satellite imagery.

Wilmar will provide recovery plans to support non-compliant suppliers in their efforts to restore the natural habitats they have damaged.

The mapping process will specifically identify smallholder plantations to ensure they aren’t negatively impacted by Wilmar’s efforts to fight deforestation.

Wilmar will make its “Grievance List” public, which will apply additional pressure on suppliers to comply with its standards in order to avoid public shaming.

Disclosure: Abacus Wealth Partners, LLC (Abacus) is an SEC registered investment adviser with its principal place of business in the State of California. Abacus may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. This brochure is limited to the dissemination of general information pertaining to its investment advisory services. Any subsequent, direct communication by Abacus with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Abacus, please contact us or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov).

This is not an offer to sell any type of security, and there is no investment currently available through Abacus. This information is provided for educational purposes only and should not be considered investment advice or a solicitation to buy or sell this security. This newsletter contains general information that is not suitable for everyone. The information contained herein should not be construed as personalized investment advice. Information was based on sources we deem to be reliable, but we make no representations as to its accuracy. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this newsletter will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

For additional information about Abacus, including fees and services, send for our disclosure brochure as set forth on Form ADV from us using the contact information herein. Please read the disclosure brochure carefully before you invest or send money.

2018 was a paradox of records set in the American economy and a stock market that could not get out of its own way.

It is almost impossible to cite all the major metrics of the economy which blazed ahead in 2018. Worker productivity, which is the long-run key to economic growth and a higher standard of living, surged. Wage growth accelerated in response to a rapidly falling unemployment rate. Household net worth rose above $100 trillion for the first time, yet household debt relative to net worth remained historically low. Finally, for the first time in American history, the number of open job listings exceeded the number of people seeking employment.

Earnings of the S&P 500 companies, paced by robust GDP growth and significant corporate tax reform, leaped upward by more than 20%. Cash dividends set a new record; indeed, total cash returned to shareholders from dividends and share repurchases since the bottom of the Financial Crisis reached $7 trillion.

But the equity market had other things on its mind. Having gone straight up without a correction throughout 2017, the S&P 500 came roaring into 2018 at 2,674—probably somewhat ahead of itself, as it seemed to be pricing in the entire future effect of corporate tax cuts in one gulp. There ensued in February a 10% correction, followed by several months of consolidation. The advance resumed as summer waned, with the Index reaching a new all-time high of 2,931 in late September.

It then went into a sharp decline, falling to the threshold of bear market territory: S&P 2,351 on Christmas Eve, off 19.8% from the September high. A rally in the last week of trading carried it back up to 2,507, but that still represented a solid four percent decline on the year, including dividends. 2018 thus became the fifth year this millennium in which the Index closed lower than where it began. At the long-term historical rate of one down year in four, that’s actually just par for the course.

As we look ahead to 2019, there remains no shortage of uncertainties, in the economy and the markets. We don’t know how well or poorly consumers will absorb the rising cost of numerous goods that are now impacted by tariffs. Nor do we know how our trade policy with China will unfold in the months ahead, and it remains to be seen what the impact on the economy will be if and when interest rates continue rising in 2019. It is only human nature to wonder if now is a good time to be invested in the markets. And this is why we have investment principles.

To that end, it will be worth restating our overall philosophy of investment advice. It is goal-focused and planning-driven, as sharply distinguished from an approach that is market-focused and current-events-driven. In our experience helping families reach their goals, successful investors act continuously on a plan; frustrated investors get that way by reacting to current events in the economy and the markets. To paraphrase David Booth, CEO of Dimensional Funds: “The most important thing about an investment plan is to have one.”

We neither forecast the economy, nor attempt to time the markets, nor predict which market sectors will “outperform” which others over the next block of time. In a sentence that always bears repeating: We are planners rather than prognosticators.

Once a client family and its Abacus advisor have a plan in place—and have funded it with what have statistically been the most appropriate types of investments—we will hardly ever recommend changing the portfolio so long as your long-term goals haven’t changed. As a general statement, we’ve found that the more often investors change their portfolios (in response to the market fears or fads of the moment), the worse their long-term results. The four most dangerous words in investing are “this time is different.”

Ownership of companies and investment real estate in the U.S. and around the world have historically been the most effective investments for keeping pace with — not only the rising cost of living, but — the rising quality of living that has unfolded over our lifetimes in a way no one could have imagined. In the year I was born, 1970, the S&P 500 index, adjusted for dividends, was 20. After five more years of the Vietnam War, three years of double-digit inflation and interest rates, four recessions and four bear markets, and the backdrop of the Cold War over the entire period, the index stood five times higher at 100 when I was in high school in 1985. Then followed the worst single-day drop in the stock market in history, the first Gulf War, two more bear markets and a recession, yet the index multiplied five times again to 500 in 1996, around the time that I completed my Ph.D. and started my first job as a “quant on Wall Street”. Today, after the 9-11 terrorist attack, the worst financial crisis since the Great Depression, five more bear markets and two more recessions, the index is yet again five times greater at 2,500. Over those 49 years, there prevailed one steady, peerless force for good, and fuel of the stock market: human innovation.

Here is to a great 2019 and to the continuance of human innovation!

Disclosure: Abacus Wealth Partners, LLC (Abacus) is an SEC registered investment adviser with its principal place of business in the State of California. Abacus may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. This brochure is limited to the dissemination of general information pertaining to its investment advisory services. Any subsequent, direct communication by Abacus with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Abacus, please contact us or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov).

This is not an offer to sell any type of security, and there is no investment currently available through Abacus. This information is provided for educational purposes only and should not be considered investment advice or a solicitation to buy or sell this security. This newsletter contains general information that is not suitable for everyone. The information contained herein should not be construed as personalized investment advice. Information was based on sources we deem to be reliable, but we make no representations as to its accuracy. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this newsletter will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

For additional information about Abacus, including fees and services, send for our disclosure brochure as set forth on Form ADV from us using the contact information herein. Please read the disclosure brochure carefully before you invest or send money.

It’s not uncommon that in the first year of my relationship with a client, we come across assets that they didn’t know they owned. Embarking upon these treasure hunts is one of the guilty pleasures of my job. And quite often the discovery comes simply from reviewing their 1040 tax form (namely Schedule B).

The conversation goes something like this:

“Tell me the story behind owning Brighthouse Financial stock.”
“I don’t own any stock.”
“Apparently you do, and they are paying you annual dividends.”

And so the treasure hunt begins…

Some of the most common assets my clients and I uncover are shares of stock in life insurance companies – and for good reason. In the late 80s and early 90s there was a large group of insurance companies who “demutualized,” meaning they moved from being a mutual company (owned by its policyholders) to a public company (owned by its shareholders). This process included offering shares of stock or cash to current life insurance policyholders. If the policyholder didn’t make a choice or ignored the letter, they were given stock.

To add to the confusion, another stock ownership was often spawned from this event. Take Metlife for example. In 2000 Metlife issued 500 million shares of stock to its policyholders. In 2017 Metlife spun-off a part of its company to become Brighthouse Financial. This meant that a shareholder of Metlife then received stock in Brighthouse. If you didn’t know you owned stock in Metlife (due to demutualization), you sure as heck don’t know that you now own stock in Brighthouse Financial.

The benefits of finding hidden assets sooner rather than later…

Aside from the obvious joy of found money, there are significant benefits to uncovering these hidden treasures and doing something about them. The importance I place on taking action comes from the very different experiences of two of my clients. For my first client (I’ll call her Jane), we uncovered her ownership of Metlife stock, called the automated system at Computershare, sold the stock and had them send her a check. The process took all of 10 minutes.

My other client (let’s call her Sarah) uncovered the Metlife stock as she tried to settle her mother’s estate. Sarah’s mother had been quite organized regarding her estate. She had created a trust and titled her significant assets to this trust. But Sarah’s mom didn’t know she owned Metlife stock. It was many forms, medallion signature requirements, a filed small estate affidavit and a year later when Sarah was finally able to take control of that Metlife stock.

The treasure hunt doesn’t have to end with stock ownership. For clients who have moved a lot in their lives, participated in rebate programs, etc., there can be cash and checks that have long since gone to their state of residence as unclaimed property. In the case of my client, Jane, we found another $500 in unclaimed rebates and small balances from old accounts by simply typing her last name into the official California unclaimed property site.

Clues to help you navigate a modern-day treasure hunt of your own…

Don’t just assume a 1099-DIV from an insurance company is because you own a life insurance policy. Some of the companies who demutualized in the early 90’s include:

Metlife

Prudential

John Hancock

Manulife

Sunlife

Unum

Computershare is one of the largest stock transfer companies. If you get letters or statements from them, you most likely own stock.

If you get quarterly statements from Computershare that lists your life insurance company stock price, you own stock in that company.

It’s highly unlikely you would have told Computershare about your change in address if you didn’t even know Computershare lists stock in your name, so if you want to investigate further, you can establish a sign-in or call Computershare to see if there are any accounts linked to your social security number. The caveat here, you must use your social security number to investigate.

Most states have an official government website to research unclaimed property. For California you simply have to type in your last name: Unclaimed Property Search. If you’ve lived in multiple states, go to each state’s official site to search.

Most importantly if you come across any of these unclaimed gems, take action. Speak with your advisor about the best way to handle your situation. You could move the stock out of Computershare to your own brokerage account, or better yet, sell and diversify. Start a claims process for any cash the States might be holding for you. Clean up these wayward assets so your heirs won’t have to. And with that extra cash in your pocket, you can reward yourself and your favorite charity.